Code of Ethics

Entrance/licensing requirements

The entrance/licensing requirements for real estate agents and property managers in France are as follows:
Transactional real estate agents:
A real estate agent, pursuant to the Hoguet law of 2 January 1970, must obtain a business card entitling him/her to conduct “Housing and Business Premises Transactions” (known as the T Card). He/she is then required to provide proof of the following:

Vocational aptitude (either by producing qualifications, or qualifications and work experience, or work experience);

Financial cover intended to guarantee the funds deposited by customers. Financial cover is fixed, according to the previous calendar year, at 120,000 Euros minimum for those who cash in funds (40,000 Euros for those who do not). It then increases in increments of 20,000 Euros.

Insurance against the pecuniary consequences of civil liability that may be incumbent upon him/her on the grounds of his/her activity.

That he/she is not incapable of or prohibited from carrying on an activity in any way;

His/her entry in the Trade and Companies’ Register.

Property Managers :

In order to carry on the profession of property manager or co-ownership association, the professional is required, in accordance with the Hoguet law, to obtain a business card entitling him/her/it to conduct “Property management” (known as the G Card).

He/she/it is then required to provide proof of the following:

Vocational aptitude (either by producing qualifications, or qualifications and work experience, or work experience);

Financial cover intended to guarantee the funds deposited by customers. Said financial cover is fixed according to the maximum amount held over the course of the last 12 months (liquidity). Financial cover stands at 120,000 Euros minimum. It then increases in increments of 20,000 Euros.

Insurance against the pecuniary consequences of civil liability that may be incumbent upon him/her/it on the grounds of his/her/its activity;

That he/she is not incapable of or prohibited from carrying on an activity in any way;

Foreign ownership

There is no legislation restricting foreign investment in France. However, the buyer must not be legally incapacitated in regard to the law applicable to the buyer’s country, nationality and religion. Once a property is purchased, the investor is required to pay income tax, unless there is a tax agreement linking France to the country of the investor’s residence (this is very often the case).

Land Registration System

Other industry professionals

Two other professionals can also be involved in the conclusion of transactions or rentals: the notary (notaire) and the bailiff. The Baliliff’s activities are restricted to rentals. The notary’s involvement is obligatory during the authentication of the act in any transaction and for advertising formalities. The real estate agent, however, proceeds without the notary’s intervention, both in the drafting of the pre-contract and that of the final deed evidencing the agreement between the parties.

Practitioner Services

Property Marketing Systems

FNAIM has a computer database, which includes the properties advertised by its 8,000 affiliated agencies. Whether they are intended for the housing or the tertiary sector, for sale or rental, these properties are available for consultation on the Web at the following address: www.fnaim.fr. The database is sectioned at local level and accessed via the Sérina software programme, which was created by FNAIM. Furthermore, over the last 7 years, the federal services have conducted a watch of the transactions market, on the basis of data gathered by members, the results of which appear every quarter, and a study of the rental market published yearly in September.

Referral System

There is no nationwide institutionalized business-sharing system. Practices are essentially founded on mutual agreement on a case-by-case basis among real estate professionals. The only rules on the subject are those established within local groupings or franchise networks. These systems are reserved for the members of these groupings.
There are companies that work at national level and those that work at local level. These latter are greater in number, but the last ten years or so have seen the formation of nationwide groups and major franchise networks. For the moment, they have not really diversified their activities beyond the real estate market.

Relationship of Buyer/Seller to Practitioner

The real estate professional carries on his/her activity within an agency, which also generally includes negotiators holding salaried employee or independent status, whose actions are controlled by the real estate agent.
Practice and jurisprudence have defined the relations existing between the real estate professional and his/her client by means of mandate regulations as determined by the Civil Code.
The real estate professional is under obligation to hold a written mandate, simple or exclusive, authorizing him/her to negotiate or engage in transactions. This mandate may be established with the buyer or the vendor.
In the case of all transactions (these are conducted solely within the agency context), the real estate professional is required to fulfill his/her duty as provider of advice and information in all dealings with the parties concerned.
The main obligations falling to the real estate agent:

He/she is required to display certain documents, in particular the following:

the business card number

the amount of financial guarantee provided

the name and address of the underwriting organization

the rates and terms governing the calculation of his/her fees.

Remuneration

In order to clearly understand the remuneration system, it is important to dinstiguish raw a t is vital to make a distinction between the transactional real estate agent, the property manager and the co-ownership association.
The transactional real estate agent:

The real estate agent’s fees are set freely.

The principal pays, having been apprised of the real estate agent’s fees, which are obligatorily displayed in the agent’s window and indicated in the contract

Said fees are only due on concluding the transaction, not before.

At the present time, under the terms of the Hoguet law of 2 January 1970, no remuneration may be granted prior to the final conclusion of the transaction. Faced with the demand for increasingly segmented services on the part of consumers, FNAIM is today very actively involved in the fight to rework the Hoguet law to enable real estate agents to offer a very broad range of services and tailor-made remuneration possibilities.

The real estate agent can choose whether or not to cash in funds; he/she must, in all cases, provide proof of the following: financial cover intended to guarantee the funds deposited by customers. Said financial cover is fixed, according to the previous calendar year, at 120,000 Euros minimum for those who cash in funds (40,000 Euros for those who do not). It then increases in increments of 20,000 Euros. Insurance against the pecuniary consequences of civil liability that may be incumbent upon him/her on the grounds of his/her activity.

The property manager:

The property administrator’s total fees are fixed in the agreement signed with the lessor.